Switching off the eco-dollar perk - Expect a dip in e-car registrations in NRW
Dropping the environmental incentive for electric cars, as per the North Rhine-Westphalian Ministry of Economy, might lead to a decrease in the number of new electric vehicle registrations. Though growth in figures has already started to taper off since the eco-bonus for commercial vehicles was withdrawn on September 1, the ministry has predicted that approximated 400,000 electric cars will be added to their fleet by the end of 2024.
Strict EU CO2 limits coming into play in 2025 should boost registrations, according to the ministry, as the automobile industry would be obligated to bring in more zero-emission vehicles to keep up with targets. A spokesperson clarified, highlighting that the projected surge would be due to the industry's need to introduce more electric vehicles to comply with these stringent limits.
From December 18, 2023, the Federal Office of Economics and Export Control (Bafa) will no longer accept fresh applications for the environmental bonus. Subsidies previously authorized will remain untouched by the cancellation and will still be paid out, as confirmed by the Federal Ministry for Economic Affairs and Energy. Applications submitted up to and including December 17 will be processed sequentially.
Initially, the federal government had planned to provide a subsidy of up to 4,500 euros for fresh vehicle purchases until December 2023. Manufacturers would also receive half the subsidy, equating to up to 2,250 euros. However, these plans have now been scrapped. Several vehicle manufacturers announced their intention to cover the state subsidy loss following the abrupt annulment of the purchase premium.
Located in the heart of North Rhine-Westphalia, Düsseldorf is renowned for its major contribution to the German auto industry. Acclaimed names like BMWi hold a presence in the region. The ecological bonus for commercial vehicles was discontinued on September 1, causing a slowdown in the growth of new registrations, as first reported by the German Press Agency dpa.
With stricter EU regulations for CO2 emissions scheduled to commence in 2025, the ministry anticipates a more rapid increase in registrations for electric vehicles. As the car industry will need to release more electric vehicles to meet fleet objectives, this policy change is expected to boost the demand for zero-emission vehicles. Additionally, the growing role of sustainable energy sources, such as electricity, in the development of electric vehicles and traffic is being acknowledged by governments and consumers as a priority, further contributing to this positive shift.
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Additional Insights
- Impact on the German auto industry: Last year, the sales of electric vehicles in Germany dropped by 27.5%, with only about 380,600 electric vehicles being newly registered. This sobering trend is exacerbated by the withdrawal of the environmental bonus, which may convince fewer buyers to opt for electric cars.
- Alternative incentives: To some extent, alternative incentives, like the Deutschlandticket scheme in Frankfurt, can stimulate the interest in electric cars by offering one-year subscriptions to public transportation to electric vehicle buyers who abandon their fossil fuel cars. Nevertheless, these alternatives might fail to have the same impact as the environmental bonus in encouraging the widespread adoption of electric vehicles.
